Rail Travellers To Face Fare Misery

Rail Fares To Increase By 8% In 2012

PRESS ASSOCIATION -- Hard-hit rail commuters face more misery as inflation figures reveal how much more they will have to pay for their season tickets in the new year.

The July retail prices index rate of inflation is used to determine the following January's annual rise for regulated rail fares, which include season and saver tickets.

The formula used to calculate the new fares is RPI plus 3, meaning fares will increase by 8%.

Elsewhere, the wider consumer prices index (CPI) rate of inflation is expected to increase to 4.4 in June, underlying the pressure on household budgets and triggering an explanation letter from Bank of England governor Sir Mervyn King to Chancellor George Osborne.

And a quarterly survey from Saga revealed a sharp fall in standard of living for older generations. For the third quarter in a row, Saga's Quality of Life Index has fallen, as soaring price levels continue to erode living standards for over 50s.

The Government changed the fare-rise formula for 2012, with the formula previously being RPI plus 1%. As train companies are allowed to make the increase an average figure, some season tickets could go up by much more than that.

The rise in rail fares comes as utility giants announce future electricity and gas bills, all of which are expected to push the CPI rate of inflation to 5% by the end of the year.

But with the UK facing a period of continued sluggish growth, the Bank expects inflation to fall below the 2 in two years' time, particularly as the impact of this year's VAT increase falls out.

Victoria Cadman, an economist at Investec Securities, said lower food and petrol prices will limit the rise this month, with recent data from the British Retail Consortium showing prices fell by 0.6% in July from June.

Fair Fares Now campaigners, led by the Campaign for Better Transport, will be at London's Waterloo station to demonstrate against the hike before the RPI rate is revealed by the Office for National Statistics. The campaign is also supported by the RMT transport union which has published a report saying rail privatisation had "bled £6.6 billion out of the rail industry since 1997".

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